I'm subcontracted, so even if my salary is half what it would be in UK, Germany, the cost for the company I work in is not so different. Their fault anyway, why don't they contract me directly?
Add to that that rotation is wild. They hire the cheapest people: those who are unemployed and would take any offer. As soon as you're employed, it's orders of magnitude easier to get a job, so hasta luego, Lucas!
Companies also have a huge burden treating with other companies or government that work terribly and terribly slow, pay when they will and often simply don't answer the phone.
There is little competitive spirit. Virtually all the big companies are there because some concession or "too big to fail" (utilities, banks) so their way to raise profit is to exploit customers and employees.
Beware! There are exceptions to all of these traits! There are good innovative companies, competitive people and internationally successful ventures. But not enough to sustain a disgruntled IT workforce that are treated as spoiled clerks.
http://www.workingcapital.telecomitalia.it/2010/09/i-piedi-i...
http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu...
And you get a lot more of them back in various ways in northern Europe.
I think it's a fairly complex question, and that's part of it. Maybe there's actually an opportunity, because I know a bunch of smart developers in Italy who work for less than they would get elsewhere. I know Italy very well, and still wonder what I'm missing, because like you say, there are taxes elsewhere too.
https://twitter.com/MicheleCaivano/status/240087376465125377...